Understanding Investment Terminology

Have your investing activities left you with a major headache? Investing can be a confusing and overwhelming process, and making mistakes can be detrimental to your finances. Browse the glossary provided below to find a number of commonly used investing terms to get the answers to your questions and to find information that you may not have otherwise had access to.

  • 401k Plan – Are you getting ready to start a 401k plan through your employer? Learn more about this form of retirement savings plan before you move forward.
  • 403b Plan – Do you work for a nonprofit organization and have been told you are eligible for a 403B plan? Find out what this is and how it varies from a 401k.
  • Active Investing – Looking to maximize your returns, even if it means incurring a higher level of risk? Explore the specifics of active investing online now.
  • Asset Allocation – If you are beginning an investment portfolio, it will be important for you to vary your investments among diverse securities. Learn about asset allocation and how it will affect your risk and return levels.
  • Diversification – When you begin investing, it is a good idea to diversify. Find out how investing in a variety of areas can help you maximize your return without putting all your eggs in one basket.
  • Down Jones Industrial Average (DJIA) – Heard of the Dow Jones Industrial Average but aren’t sure how it differs from the other stock indexes? Get the facts on this option and find out whether or not is offers an accurate picture of the market overall.
  • Efficient Frontier – Wondering how risk level and expected return are calculated for your portfolio? Learn more about the Efficient Frontier method.
  • Exchange Traded Fund (ETF) – Wondering about the difference between mutual funds and ETFs? Find the answers you are looking for online now.
  • Expense Ratio – Heard your investment advisor talk about expense ratios? Find out what exactly this expense is, how it is calculated, and how it will affect your investing activities.
  • Hedge Funds – Confused by the difference between a mutual fund and a hedge fund? Explore the benefits of this type of private investment and the risks associated with such.
  • Index Funds – Looking for information on index funds? Find out what exactly these funds entail and what type of expense ratio you can expect with investments in this type of fund.
  • IRA (Individual Retirement Account) – Is it time for you to begin saving for retirement? Learn about IRAs, their benefits, and how you can rollover your 401k to such an account.
  • Load – Wondering about the fees and charges associated with certain investing activities? Learn about the different types of loads to get a better understanding of what to expect.
  • Modern Portfolio Theory (MPT) – Confused by the relationship between risk and return? Explore the Modern Portfolio Theory in more detail to understand why higher risk offers higher return.
  • Momentum – Wondering how investors analyze stock prices to make predictions? Learn how velocity is used to measure the rate and direction of change.
  • Mutual Funds – Interested in investing in a mutual fund, but need more information first? Get the specifics on this type of fund and why they may be a beneficial investing opportunity to pursue.
  • NASDAQ Composite – Wondering what exactly the NASDAQ (National Association of Securities Dealers Automated Quotation) composite is? Find out how it measures its securities and what types of industries are traded within it.
  • Passive Investing – Looking for a safe route for your investing activities? Learn about passive investing and how it can provide assurance for moderate performance of your investments.
  • Registered Investment Advisor (RIA) – Thinking about seeking a portfolio manager for your investing activities? Learn about Registered Investment Advisors and how they can help you.
  • Rollover IRA – Need to take action on your 401k but aren’t sure exactly how to proceed? Find out if a rollover IRA is your best bet.
  • Roth IRA – Explore the differences between traditional rollover and Roth IRAs to determine which option is the best for your savings plan.
  • Standard & Poor’s 500 Index – Learn about this stock index and how it helps investors to more accurately gauge the U.S. equities market over a variety of industries.

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Debt Consolidation Loan – Most of this site is dedicated to assisting those with debt problems, and its goal is to get you to a point of financial stability. So what happens when you do get your personal finances on level ground? It is time to start thinking strategically about how you save your money. See below for a lot of helpful information on the management of your 401k.